The overall implementation rate of the 2019 country-specific socio-economic policy recommendations “remained low” despite a rather favourable economic environment over the last years, the European Finance Ministers noted in conclusions adopted on Tuesday 19 May, on the eve of the European Commission's presentation of draft country-specific recommendations for the 2020 financial year.
This implementation differs across policy areas and Member States: it has been “strong in financial services and active labour market policies” while “progress has remained slow in addressing competition in services and with regard to the long-term sustainability of public finances”.
However, apart from the urgent measures taken in response to the Covid-19 pandemic, ministers stress that the structural vulnerabilities, identified before the health crisis by the Commission in February (see EUROPE 12434/4), remain valid and will have to be addressed in the medium term to support recovery from the crisis.
They also take up the analysis on macroeconomic imbalances that had been described as excessive for Greece, Cyprus and Italy, among others.
In its proposal for a European Recovery Fund, which it will present on Wednesday 27 May, the Commission will propose to link financial support to a - non-legally binding - follow-up in the framework of the 'European Semester' budgetary process.
Asked about a possible reform to make this process more intrusive, European Commission Vice-President Valdis Dombrovskis said that the European institution’s idea was to apply the same incentives for structural reforms and investment to the EU27 as for the mobilisation of the future budget for the euro area countries. The country-specific recommendations expected on Wednesday will take into account the current crisis by focusing on both short- and medium-term issues, he added.
See EU Council conclusions: https://bit.ly/2LGHUl5 (Original version in French by Mathieu Bion)